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  • Compliance engagement

    Our activities to ensure correct reporting raised more than $3 billion in GST liabilities as at 30 June 2018, compared with $2.9 billion at 30 June 2017.

    We continue to refine our data models and improve the output and accuracy of cases, resulting in greater than expected revenue outcomes. We continue to work more closely with our client base and this has led to a higher level of engagement.

    The following table shows the highlights of our compliance activities for 2016–17 and 2017–18:

    Table 1: Compliance activities results, 2016–17 and 2017–18

    Compliance activities

    2016–17

    2017–18

    Client contact cases

    1.1 million

    1.0 million

    Disengaged property developers

    Raised $227 million in liabilities from over 2,500 audits and reviews

    Raised $289 million in liabilities from over 2,000 audits and reviews

    Other GST risks in the property market

    Raised nearly $114 million in liabilities from around 3,220 audit and review cases

    Raised over $138 million in liabilities from around 1,286 audit and review cases

    GST refund claims

    Verified approximately 43,660 GST refund claims, raising nearly $383 million in GST liabilities, with approximately:

    • 23,000 verified before payment of refund, resulting in 4,450 adjustments and $294 million in GST liabilities
    • 20,350 verified after payment of refund, resulting in nearly 1,246 adjustments and $88 million in GST liabilities.
     

    Verified approximately 37,350 GST refund claims, raising nearly $353 million in GST liabilities, with approximately:

    • 21,000 verified before payment of refund, resulting in over 4,000 adjustments and $269 million in liabilities
    • 16,000 verified after payment of refund, resulting in nearly 860 adjustments and $84 million in liabilities.
     

    Large cases adjustments over $20 million

    $288 million

    $187 million

    Black economy

    Raised $75.18 million in liabilities from cases associated with the cash or hidden economy and not paying the correct amount of GST

    Raised $74.61 million in liabilities from cases associated with the cash or hidden economy and not paying the correct amount of GST

    Figure 13: Compliance liabilities raised

    Compliance liabilities raised for the last six financial years are: 2012–13 $2.3b; 2013–14 $3.4b; 2014–15 $2.6b; 2015–16 $3.3b; 2016–17 $2.9b; and 2017–18 $3.0b.

    Costs

    The cost of administering GST is calculated by applying the ATO’s strategic costing framework. This is a cost attribution model consistent with the Australian Government’s accrual-based outcomes and programs costing framework. It calculates the proportion of our total operating expenses that relate to GST administration activities on a full-cost basis.

    The cost drivers are monitored monthly and are subject to review by the ATO Chief Finance Officer, the ATO GST Product Committee chaired by the Deputy Commissioner of Indirect Tax, and other ATO senior executives. The costs of administering GST are subject to an annual independent audit by the Australian National Audit Office (ANAO).

    In 2018–19, we will review the activities used to describe how we undertake administration of the GST. The review drivers are the ongoing change in strategies and activities, and a desire to more clearly report on how we use resources in the administration of the GST.

    We will incorporate any changes to the activities into the cost attribution model and reporting of the cost to administer the GST. In 2018–19, the actual cost may be higher than the current estimate.

    In the interim, the actual cost attributed to GST administration activities has been set as the Schedule B estimate of $631.1 million for 2017–18.

    Figure 14: Administration costs for 2013–18

    Administration costs raised for the last six financial years are: 2012–13 $705.3m; 2013-14 $690.4m; 2014–15 $681.1m; 2015–16 $679.6m; 2016–17 $682.4m; and 2017–18 $631.1m.

    Breakdown of costs

    Both direct and indirect costs decreased in 2017–18. Direct costs of $358.4 million were $16.6 million (4.4%) below the 2016–17 result. Indirect costs of $317.8 million were $5.3 million (1.6%) below 2016–17. Direct costs were 53% of total costs. This is a reduction of 0.7% from 53.7% in 2016–17.

    Administration costs as per Schedule B have been steadily decreasing as the ATO seeks to find savings and build efficiencies.

    The direct cost of the GST voluntary compliance program in 2017–18 was $72.8 million, which is 21.4% less than 2016–17 ($92.6 million).

      Last modified: 18 Mar 2019QC 58283